How do you track and analyze the data and metrics of your employee referral program?

Employee referrals are one of the most effective and cost-efficient ways to hire top talent, but how do you measure the success of your employee referral program? Tracking and analyzing the data and metrics of your employee referral program can help you optimize your strategy, reward your employees, and improve your hiring outcomes. In this article, we will show you how to track and analyze the data and metrics of your employee referral program using four steps.

1 Define your goals

The first step is to define your goals and objectives for your employee referral program. What are you trying to achieve with your employee referrals? How do you align your employee referral program with your overall hiring strategy and business goals? Some common goals for employee referral programs are to increase the quality, diversity, and retention of hires, to reduce the time and cost of hiring, and to boost your employer brand and employee engagement. You should also set specific, measurable, achievable, relevant, and time-bound (SMART) targets for each goal, such as increasing the referral rate by 10% in six months, or reducing the cost per hire by 20% in a year.

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2 Choose your metrics

The next step is to choose metrics that will help you measure your progress and performance towards your goals. Metrics are quantitative indicators that show how well your employee referral program is working. It’s important to select metrics that are relevant, reliable, and easy to track and report. Common metrics for employee referral programs include referral rate (the percentage of hires from employee referrals), referral quality (the percentage of referred candidates that pass screening and interview stages), referral diversity (the percentage of referred candidates from underrepresented groups), referral retention (the percentage of referred hires that stay with the company for a certain period), referral cost (the average cost of hiring a referred candidate, including incentives, bonuses, and administrative costs), and referral time (the average time it takes to hire a referred candidate, from sourcing to onboarding).

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Marc Hammer

LinkedIn Top Voice | Executive Search - Digital & Tech | Interim Management | Leadership Advisory | Board Members
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Add a "referral engagement score" that measures the active participation of current employees in the referral programme (active employees / total number of employees). This can be critical to understanding and improving internal promotion of the programme. One result might be that your internal employees are very active in referring candidates, but you never hire any. Why not? Wrong profile? This could be very discouraging for employees and you need to act quickly. Or you may find that only a low percentage of employees are participating - in which case you could work on improving the programme.

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3 Collect your data

The third step to your employee referral program is to collect data from various sources and tools. It is important to collect your data regularly and consistently, and ensure that it is accurate, complete, and secure. Sources and tools such as an Applicant Tracking System (ATS) can help you manage the hiring process and track referrals. A software such as an employee referral platform can help automate and streamline the program, while employee surveys can help you gather feedback and insights from employees. This data can be used to measure and improve employee engagement, employer brand, and referral culture.

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4 Analyze your data

The fourth and final step is to analyze your data and metrics to evaluate your employee referral program and identify areas of improvement. You can use various methods and techniques, such as benchmarking, trending, segmentation, and correlation. Benchmarking can compare your data and metrics with industry standards, best practices, or competitors. Trending examines the data and metrics over time to see how they change. Segmentation breaks down the data and metrics by different categories or groups. Correlation finds the relationship between two or more data and metrics. By tracking and analyzing these metrics, you can gain valuable insights into your hiring performance, employee behavior, and business outcomes. This can help you optimize your referral program, reward your employees, and improve your hiring outcomes.

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5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Marc Hammer

LinkedIn Top Voice | Executive Search - Digital & Tech | Interim Management | Leadership Advisory | Board Members
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Explore the impact of gamification in your referral programme. Introducing elements such as leaderboards, badges or rewards for different levels of participation can significantly increase employee engagement and enthusiasm.

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How do you track and analyze the data and metrics of your employee referral program?

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1 Define your goals

2 Choose your metrics

3 Collect your data

4 Analyze your data

5 Here’s what else to consider

Corporate Recruiting

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